darren.chester.mp@aph.gov.au 1300 131 785
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February 14, 2012

Mr CHESTER (Gippsland) (18:31): I would like to commend the member for Murray for her thoughtful contribution on the Fairer Private Health Insurance Incentives Bill 2011, and I associate myself with the concerns she raised, particularly when she highlighted the regional impacts of this legislation. I will be joining my colleagues in opposing the bill.

There is an increasing air of desperation that surrounds everything this government undertakes and this, I believe, is most apparent in the bill before the House. This bill is not about improving health services; it is about fixing a budgetary black hole, as the member for Murray just indicated. It represents another clear breach of trust between this government, its Prime Minister and the Australian public.

If those opposite are still wondering why the support for the Prime Minister continues to diminish, they need to look no further than the lack of trust that exists between her and the Australian public, and that flows into a complete lack of respect for this Prime Minister and the government she leads. Quite simply, the member for Griffith, Kevin Rudd, could not trust the Prime Minister, and why should anyone else.

Despite repeated assurances that Labor would not touch the system of private health insurance rebates, here we are again today debating another policy change that represents a monumental betrayal of the Australian people. Increasingly, the Australian public see that the member for Lalor is a deal maker. She is not a Prime Minister. She will do anything and say anything to cut a deal and hang on to power, even at the expense of Australian jobs and at the expense of adding to the cost of living for Australian families. Her negotiations to form a minority government were all about deal making. She made a deal with the Greens, and that is how we ended up with the carbon tax, which is another fundamental breach of trust with the Australian people. The Prime Minister made a deal with the member for Denison on pokies reform and then promptly reneged on that arrangement which was another breach of trust. And who knows what other deals she has done among her factional allies and her union mates to cling to power. Australians simply have no reason to believe the assurances being offered by this Prime Minister that the changes to health insurance we are debating today will not have negative impacts.

This is the Prime Minister who repeatedly assured the Australian people that there would be ‘no carbon tax under the government she leads’, and then proceeded to introduce a tax that kills jobs as it destroys Australia’s competitiveness on world markets. On that point, even if you accept the Prime Minister’s protestations and assurances that her government is not responsible for job losses in the manufacturing sector, why is the government making it harder for Australian businesses? If ,as the Prime Minister likes to say, the job losses are simply growing pains and are more about the high Australian dollar and global markets, why add to the cost base of Australian industries? Why at this time impose the world’s biggest carbon tax and make it tougher for Australian businesses to employ people?

The Prime Minister’s handling of the carbon tax and the trust deficit she has created are consistent with a pattern of behaviour that has dogged both the Rudd and Gillard governments. I do not make these comments tonight with any great sense of pleasure or triumph, because there is an overwhelming sense of disappointment in my electorate with the way this Prime Minister is running a government that is clearly out of its depth and unable to manage national affairs. As someone who does have genuine respect for the office of Prime Minister, it gives me no personal satisfaction to listen to people speak very disparagingly about Prime Minister Gillard.

Overnight my office, and many other offices, I am sure, received more emails criticising the Prime Minister. This time they are focused on the issue of private health and the absolute sense of betrayal they feel. The Prime Minister has to take responsibility for her actions. The people of Gippsland are merely reacting to her performance in the role. They were prepared to give her a go, and she has let them down. It has been a prime ministership of monumental disappointment and it all boils down to trust. Now we have this growing lack of respect for her ability to manage our nation through what are increasingly turbulent times.

The bill before the House will hurt Australian families by adding to their cost of living and by placing more pressure on the public health system. I do not think there is much debate about that. Even on the other side they acknowledge that there will be people who will be adversely affected by the government’s proposed changes in this bill. If you make something more expensive, you will have an impact on demand for the product and people who are already facing serious cost of living pressures will make the decision not to purchase the product.

The changes before the House will force people to drop their private health insurance cover or choose cheaper cover with more procedures excluded. There is no question it will cause upward pressure on insurance premiums and force more people into an already over-stretched public hospital system.

The impact of this will not just be felt by those on higher incomes, who will incur up to a 43 per cent increase in their premiums. It will be felt by all Australians with private health insurance as they face higher premiums into the future, if these changes proceed. There is a class warfare element to this debate, which I find very disturbing. We have had the minister and others trotting out lines about it not being fair for a person on $50,000 a year to be subsiding the private health premiums of a person on $200,000 per year. Those are the kinds of lines they are hoping to get away with in the media to stimulate a bit of class warfare in the broader community. What they forget to mention is that the person earning $200,000 a year will already be on the highest income tax bracket and in all likelihood will be making a bigger contribution to government revenues through that system alone. They would also contribute more under the existing Medicare levy system. So the politics of envy and the class warfare associated with those comments from the Labor Party should be condemned by all members of this place.

I appeal to the crossbenchers. They have the opportunity to save this government from itself. This government is about to make another huge mistake that will hurt everyday Australians, particularly in regional areas. The crossbenchers have the opportunity to stand up for their electorates and prevent this government from passing on more pain to the Australian community.

The coalition supports choice in the health system, and, by supporting private health insurance rebates, we have been successful in taking pressure off the public system. The private system is an important part of health service delivery in Australia today but, if you listen to those opposite, it seems that they regard it as a playground for the rich and famous to have trivial treatments. The fact is that private hospitals treat 40 per cent of all patients in Australia and perform 64 per cent of elective surgery. In 2009-10, that amounted to private hospitals servicing more than 3.5 million patients.

If this bill is passed, it will not be just the wealthy who will be hurt by another Labor broken promise. It is estimated that 2.4 million people will be directly affected by these changes, and they will face immediate increases in their premiums. Deloitte’s analysis of the changes shows that, in the first year, 175,000 people would be expected to withdraw from private hospital cover and a further 583,000 would downgrade their cover. Over five years, it is expected that 1.6 million will drop cover and 4.3 million will downgrade.

It is significant that this government has not disclosed the numbers of people expected to downgrade, but, as premiums increase significantly for those in the income tiers, it is reasonable to expect they will seek cheaper products, which would have second-round effects for the public hospitals. That is the fundamental point to this debate, and it has been made over and over again by speakers on this side of the House. If people drop out of the private health system or take a reduced form of cover, the premiums will increase for those remaining in the system.

It completely destroys the insipid argument which has been put forward by the Minister for Health and others—that those on low incomes will not be affected by the removal of the rebate. They will suffer the flow-on consequences as those who are affected by the withdrawal of the rebate exit the system or take a lower form of cover and put upward pressure on premiums in the future.

You simply do not make the public health system stronger by weakening the private system. This bill will erode confidence in our private health system, and not a single extra dollar will be spent on the public system as a result.

All of this is coming from a Labor Party which went out of its way to promise the health industry and the Australian people that it would not make changes to the existing system. The letter to the Australian Health Insurance Association in 2007 made it abundantly clear that Labor supported the existing system:

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

Federal Labor will also maintain Lifetime Health Cover and the Medicare levy surcharge. Labor will maintain the existing framework for regulating private health insurance, including the process for approval of premium increases. Zero per cent premium adjustment is not Labor policy.

Many on this side have quoted the member for Lalor, the member for Griffith and the former minister for health in relation to this issue. They all sought to assure the Australian people that Labor would be a safe pair of hands if given the responsibility of government. But clearly that was not the case. When they were given the opportunity to govern, when the Australian people put their trust in the Australian Labor Party, true to form Labor set about another bout of class warfare and tried to undermine those people who had dared to prepare for their own health needs in the future. This broken promise is a betrayal of the Australian people who believed those reassurances offered by so many Labor members in the past.

The legislation before the House is not about health reform; it is about class warfare and the politics of envy and it is all about propping up a budget that has been blown to pieces by reckless spending and a wasteful government that has failed to deliver value for money for taxpayers’ dollars. And those opposite wonder why the Australian people simply do not trust them to govern.

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